Govt bonds over-subscribed; FIIs put in bids worth Rs 974 cr

14 bids were declared successful at the end of two-hour auction

Government bonds today attracted bids of Rs 974 crore from foreign investors against Rs 556 crore worth of securities put on offer.

The auction was held at NSE's e-bid platform for allocation of Foreign Institutional Investors (FIIs) investment limits in government debt securities worth Rs 556 crore.

At the end of two-hour auction this evening, 14 bids were declared successful.

The debt auction quota gives overseas investors the right to invest in the debt up to the limit purchased.

Depository data showed that total investments, including limits acquired by foreign investors through the auction route, stood at Rs 1,23,876 crore till August 6, which is 99.5 per cent of the total permitted investment limit of Rs 1,24,432 crore in government debt securities.

Consequently, the exchange has decided to conduct an auction for the allocation of unutilised debt limits.

During earlier auctions, government bonds have always been subscribed multiple times, given the huge interest among foreign investors, while the demand for corporate bonds remains less.

Last month, BSE (formerly known as Bombay Stock Exchange) had conducted an auction for government bonds worth Rs 403 crore, which attracted bids worth Rs 751 crore.

Foreign investors are allowed to invest up to USD 25 billion (Rs 1,24,432 crore) in government debt securities through auction while an investment of up to USD 5 billion (Rs 29,137 crore) is permitted 'on tap'.

Further, the Reserve Bank of India (RBI) is in talks with the government to reset FII limit in government bonds in rupee terms.